Money spent on locum doctors could be used to attract and retain permanent staff

RNZ News

a day ago

Health NZ has spent almost $45m on locum doctors in the Midlands Te Manawa Taki region including Waikato, in less than a year.
Photo:
Supplied/ Waikato Hospital
The amount of money Health New Zealand is spending each year on locum doctors to plug staff shortages is increasing by tens of millions of dollars a year, and could reach $200 million this year.
RNZ has obtained figures that show the spend on fill-ins is rising fast, leading a frontline doctor and the senior doctors' union to voice frustration.
Dr Ralston D'Souza is a rural hospital medicine specialist at
Taupō Hospital, where a shortage of senior doctors
means there's a revolving door of locums.
"The frustration though is that we're being told constantly there's no money to improve recruitment and retention of our permanent staff in terms of any initiatives, but there's no limit, it seems, at spending money on locums."
Health's a big-budget item. It's expected the government will spend $32.7 billion in the 2025-26 financial year.
The figures RNZ has obtained show in the 2022-23 financial year, the cost of "outsourced specialist medical staffing" was more than $150 million.
It was more than $183m in 2023-24 and for the nine months to March in the 2024-25 financial year it climbed over $155m, meaning it was on track to break $200m for the full year.
Health NZ doesn't "hold records centrally" before its creation in July 2022, when locum spends were managed by district health boards.
D'Souza wasn't surprised to see that growth.
"We know on the ground that locums probably get paid three to four times more than a permanent staff member, but the locums don't actually do anything apart from service delivery.
"They don't contribute to the training of the other staff, including resident [junior] doctors, and they don't improve the quality of the service in terms of quality-improvement initiatives."
Health NZ won't release its full list of rates for locum work, but has given RNZ a summary, which shows junior doctors get between $55 and $130 an hour, and seniors between $1500 and $3000 a day.
D'Souza wants officials to think about why it's so difficult to recruit and retain permanent specialists.
"Health New Zealand seems to be spending a lot of resources on being reactive when a gap occurs, but they're not spending as much resource on being proactive - understanding why the gap has occurred in the first place."
Health NZ's interim chief human resources officer Fiona McCarthy said although Health NZ would rather employ permanent medical specialists, locums had been used for decades.
"Locums for specialist medical staffing are used for a diverse range of medical specialities, including general surgeons, anaesthetists, psychiatrists, sonographers, cardiologists amongst many others," she said.
"Reasons for employing a locum can include staffing gaps due to sickness, leave or unfilled posts.
"Locums are most often required for weekend and acute calls. At times locums can also be employed to address surges in demand or reduce waitlists."
McCarthy said there were "long-standing workforce challenges" in some specialist areas, and officials were "working at pace to address this to ensure the needs of local communities continue to be prioritised".
Health NZ grew its clinical workforce by 1689 full-time equivalent staff members in the 2024 calendar year, she said.
The senior doctors' union head Sarah Dalton says there's a large number of locums working in New Zealand.
Photo:
LDR / Stuff / Kevin Stent
Association of Salaried Medical Specialists executive director Sarah Dalton said the problem of specialist shortages was sizeable.
"If you want to think about how many locums are being paid in a year to work in our system, we were looking at the numbers and thinking that's the equivalent of the entire medical staff of either Waikato or Waitematā districts."
RNZ asked Health NZ for the number of locums it uses, but it said it didn't have that information, instead providing full-time equivalent figures that show 374 FTEs were used in the first nine months of the 2024-25 financial year, and 380 the previous year.
It did, however, provide regional breakdowns, and in the 2024-25 year's first nine months the largest locum spend was in Te Manawa Taki Midlands region, at just under $45m. The region includes Waikato, Bay of Plenty, Lakes, Taranaki and Tairāwhiti.
The central region, including Palmerston North, Whanganui and Wellington, spent just over $44m.
RNZ also asked for a breakdown in figures by speciality, but was told this couldn't be done because the information "is not held in that form and would require considerable technical expertise to create".
Sarah Dalton and the association, the senior doctors' union, were critical of this.
Union officials knew, for example, of shortages in psychiatry, and had heard anecdotal evidence of psychiatrists giving up permanent work for locum jobs, but there were gaps in knowledge in other areas.
"That's an endless bugbear for us, that they [Health NZ] aren't doing sufficient work on their workforce, current or future planning, to have an intelligent or informed conversation about the state of the problem," Dalton said.
"But, what we can see from this data is they are spending more and more money on locums. It is a wildly expensive way to staff hospital."
Settling senior doctors' collective agreement claims would cost less than a quarter of the annual outsourced specialist spend, she said.
An over reliance on locums led to lower productivity, while permanent staff were burdened with doing the tough shifts temporary workers turned down.
"It's incentivising our senior doctors to pick up locum work at the expense of a salaried job.
"We really need to turn that around and that's what we've been trying to do by trying to look at improved conditions, recruitment and retention payments, and bonuses for people who choose to work only in public [hospitals]."
Health Minister Simeon Brown said locums play an important role.
Photo:
Nathan Mckinnon / RNZ
Patient Voice Aotearoa's Malcolm Mulholland has heard at the advocacy group's nationwide roadshows endless stories about how staff shortages are affecting patients and the health workforce.
"The sad picture that it paints is that it's a horrific cost and one would have to think are these resources best allocated elsewhere in the health system?
"I can't help but think that perhaps we need to bolster something like the bonding system in hard-to-staff areas, which is traditionally where locums are needed."
Health Minister Simeon Brown said his priority was to make sure patients received the care they needed, where they needed it.
"Locums play an important role in keeping services running, especially in hard-to-staff areas, but ultimately, we want more permanent staff delivering care across New Zealand," he said.
"Since 2023, we've grown our health workforce, with over 1700 more nurses and more than 200 additional doctors employed by Health New Zealand as at December last year.
"That's real progress, but there is more to do."
Brown said the challenge wasn't unique to New Zealand and there was a "global war for talent in healthcare".
Given the better pay rates and flexibility, even D'Souza had considered joining the army of temporary medical specialists.
"I think that's definitely a thought that's occurred to all permanent staff and it goes back to that there's probably no great incentive to be permanently employed.
"All of us are probably sticking at it because of the goodwill we have towards our community, towards our patients."
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